A buyer’s market: Home sales up 57% and prices aren’t going to rise anytime soon



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NEW DELHI: India’s top eight real estate markets recorded sales of 66,548 units in the September quarter (Q2 FY 21-22), an increase of 17% from the previous June quarter when 57,903 homes were sold, according to a report by Liases Foras Real. Real estate appraisal and research. Overall sales in the Tier 1 cities of Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, MMR, NCR and Pune grew by 57%.
Sales are largely driven by discounts and several programs advertised by manufacturers. The jump could also be attributed to the lowest 10-year mortgage interest rates, which are currently available at an annual interest rate of 6.50%. “It’s a buyer’s market,” says Pankaj Kapoor, Managing Director of Liases Foras.
The pandemic-induced lockdown was another big factor as people realized they needed more space in the home for work from home, education, quarantine, among others. This trend can be seen in a detailed report by real estate consultancy Knight Frank, which said the share of ticket size sales from Rs 50 lakh to Rs 1 crore increased by 35% in the third quarter of 2021 from 32. % a year ago while the share of home sales in the category of tickets under Rs 5o lakh fell to 43% in the third quarter of 2021, from 45% a year ago.
Which cities recorded the maximum sales?

As shown in the table above, sales recorded a maximum recovery in Bangalore of 99% year-on-year, followed by Pune (69%), Hyderabad (62%), Ahmedabad (58%), Chennai (57%) , MMR (56%), RCN (35%).
Sales also fell: Kolkata was the only city that saw a drop in sales. The drop can be attributed to the surge in the second wave of covid-19.
On a quarterly basis, Ahmedabad was the winner with sales growth of 45%, followed by NCR (31%), Pune (23%), Chennai (15%), Hyderabad (12%),
MMR (6%), Bangalore (6%) and Calcutta (2%).
Tell me about the prices:
Home prices, however, were flat or unchanged in Bangalore, MMR, NCR and Pune on a quarterly basis. Chennai, however, saw its prices rise by 3 percent, while Ahmedabad and Hyderabad both saw a 1 percent increase. Kolkata was the only city that saw prices drop by a percentage.

On an annual basis, the weighted average price in Tier I cities has increased by 1%. Hyderabad saw the maximum increase of 4%, followed by Pune at 3%, 2% in Ahmedabad, Chennai and NCR. Even on an annual basis, prices fell 2% in Kolkata and 1% in Bangalore. In Mumbai, the prices have remained the same.
Nobody expects prices to go up because …
Prices are unlikely to rise anytime soon as developers look to increase sales to improve their cash flow as unsold inventory declined only slightly in cities in the second quarter of FY21-22 and remained at 896,404 units. In fact, the unsold stock rose in Hyderabad by 13% and in Ahmedabad by 9% as it declined or remained almost stable at MMR on a quarterly basis.
Inventory months (a measure of the lifespan of all existing homes on the market) in these real estate markets was 40 months in September, dropping from 48 months in the June quarter.
“In total, inventories have decreased by 39% on an annual basis. In Bangalore, they decreased by 59%, followed by Pune (46%), Ahmedabad (39%), MMR (37%) Chennai (35%), NCR (29%%) Hyderabad (18%) and Calcutta by 4 %.
Is the fresh supply reaching the market?
New launches in Tier I cities are up 238% year on year and 33% on a quarterly basis. In most cities, the September quarter saw the peak number of launches in the past six quarters, as restrictions eased nationwide and construction resumed after the second wave.
New launches saw maximum growth in Ahmedabad (169%) followed by MMR (48%), Hyderabad (39%), Kolkata (36%), Pune (25%), NCR (8%). Launches decreased in Bangalore by 39% and in Chennai by 9% on a quarterly basis. Launches in Chennai have finally reached normal levels at 4,375 units compared to 175 units last year this time around. Bangalore saw the maximum reduction in unsold inventory of 9%, followed by Pune (5%), Chennai (3%), Kolkata (2%) and NCR (1%).
Tell me more about the two biggest markets – NCR and MMR
In the National Capital Region, Faridabad saw the largest increase in sales (110%), followed by Gurugram (52%), Bhiwadi (36%), Ghaziabad (25%), Greater Noida (12%) .
In the Mumbai metropolitan area, sales grew the most in the western suburbs (beyond Dahisar) by 35%, followed by Thane by 32% and the central suburb by 31% on a quarterly basis.

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